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Market outlook: rapid growth in voluntary carbon markets with rising demand for high-quality credits

DGB Group N.V. (“DGB” or “the Group”) (Euronext: DGB: NL0009169515), a leading carbon project developer and ecosystem restoration company, projects a continuation of strong demand for high-quality carbon credits in the rapidly evolving voluntary carbon markets. As the demand for verified carbon emissions reduction grows, DGB expects a continued shift towards high-quality removal credits from nature-based solutions.

Carbon credits allow organisations to reduce their emissions through offsets today, while taking cost-effective action to reduce future emissions through sustainability in their business models. With more than 130 countries and all member countries of the Organisation for Economic Co-operation and Development (“OECD”) adopting net-zero targets by 2050, carbon credits are an essential tool for businesses to achieve their decarbonisation goals. 

Carbon price outlook

In 2021, the voluntary carbon market experienced record growth, reaching $2 billion, a fourfold increase compared to 2020. This momentum continued in 2022, with projections from leading firms such as EY, McKinsey, and BCG estimating the market could reach between $10 billion and $40 billion by 2030. This growth is driven by an increasing number of companies setting net-zero targets and a rising focus on removal credits, which directly lower existing emissions.

DGB likewise sees a positive outlook for carbon credit markets as demand for high-quality credits increases. The Group foresees a significant price increment towards 2030 due to a shortage of carbon credits from removal projects. DGB predicts that the volume of credits required globally will increase at least 20-fold by 2035, with prices rising to a central estimate of $80–$150 per tonne by 2035. It forecasts a verified emissions reduction price rise of 9.5% to 15.0% per year towards 2035 and a 4.0% to 6.0% price increase from 2035 to 2050. 

Trends

DGB is one of the fastest-growing companies in the carbon marketplace and recognises the following trends in the markets:

  • Nondiscretionary spending on carbon credits and growing demand: The growing importance of carbon credits in achieving net-zero targets leads to an increasing demand for nature-based credits, potentially outstripping supply.
  • A shift toward removal credits by 2030: DGB acknowledges that both avoidance and removal credits are essential for achieving global goals, but expects removal credits to dominate corporate portfolios by 2030, attracted by their quality and verifiability.
  • The increasing influence of external organisations: Organisations, such as the Science Based Targets initiative and the Voluntary Carbon Markets Integrity Initiative, are expected to shape market trends and impact growth.
  • The critical role of a reputable monitoring, reporting, and verification (“MRV”) framework: MRV will play a major factor in credit-purchase decisions, ensuring purchased credits have a measurable and defensible impact.

High-quality

DGB emphasises the importance of high-quality credits. To be effective, carbon credits must be of high quality and integrity, which was not always the case in the early use of credits. DGB recognises that, to give all stakeholders confidence that carbon credits are a legitimate part of the decarbonisation toolkit, will require further improvements in the quality and integrity of carbon credits and associated assurance processes. 

DGB is committed to developing high-quality carbon credit projects that deliver genuine positive impact. We believe high-quality carbon credits will be scarce and expensive, as rising demand, a race to quality, and higher unit supply costs make high-quality credits increasingly valuable across all outlooks. 

DGB believes high-quality carbon credits are an essential part of the decarbonisation toolkit, enabling organisations to support immediate beneficial action on ecosystem restoration and nature conservation. Credits play a crucial role in offsetting hard-to-abate emissions from products that lack low or zero emissions options and enable finance for local community, biodiversity, and nature conservation.

 

Contact details:

DGB GROUP NV
press@dgb.earth
+31108080126

 

About DGB:

DGB is a project developer of high-quality, large-scale carbon and biodiversity projects accredited by third parties. The Group is focused on nature conservation and helping biodiversity flourish by assisting governments and corporations in achieving net zero. Global megatrends drive the demand for carbon credits and underpin growth opportunities. DGB GROUP NV is a public company traded on the main Dutch stock exchange Euronext Amsterdam under the ticker symbol AEX:DGB and ISIN-code NL0009169515. www.green.earth 

 

Disclaimer:

This press release does not contain an (invitation to make an) offer to buy or sell or otherwise acquire or subscribe to shares in DGB and is not an advice or recommendation to take or refrain from taking any action. This press release contains statements that could be construed as forward-looking statements, including about the financial position of DGB, the results it achieved and the business(es) it runs. Forward-looking statements are all statements that do not relate to historical facts. These statements are based on information currently available and forecasts and estimates made by DGB’s management. Although DGB believes that these statements are based on reasonable assumptions, it cannot guarantee that the ultimate results will not differ materially from those statements that could be construed as forward-looking statements. Factors that may lead to or contribute to differences in current expectations include, but are not limited to: developments in legislation, technology, tax, regulation, stock market price fluctuations, legal proceedings, regulatory investigations, competitive relationships and general economic conditions. These and other factors, risks and uncertainties that may affect any forward-looking statement or the actual results of DGB are discussed in the annual report. The forward-looking statements in this document speak only as of the date of this document. Subject to any legal obligation, DGB assumes no obligation or responsibility to update the forward-looking statements contained in this document, whether related to new information, future events or otherwise.

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